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CMA Final · Direct Tax Laws and International Taxation · E-commerce Transaction and Liability in Special Cases

Under section 393(1) of the Income-tax Act, 2025 (Table Sl. No. 8(v)), at what rate must an e-commerce operator deduct tax on the gross amount of sales facilitated through its platform for a resident e-commerce participant?

The e-commerce operator deducts tax at 0.1% of the gross amount of sales or services facilitated through its platform for a resident participant. The Table has a nil threshold for this entry. The 1% rate applies to virtual digital asset transfers, not to e-commerce payments.

  1. A0.1% of the gross amount of sale or servicesCorrect
  2. B1% of the gross amount of sale or services
  3. C2% of the gross amount of sale or services
  4. D10% of the gross amount of sale or services

Explanation

Sl. No. 8(v) of the section 393(1) Table prescribes tax deduction by an e-commerce operator at 0.1% of the gross amount of sale or services or both, with a nil threshold. The 1% rate relates to transfer of a virtual digital asset (Sl. No. 8(vi)), and 2% is the contractor or commission rate, so those options are wrong.

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